The boss of a major oil and gas services firm has said operators could cut the cost of their North Sea projects in half if they embraced calls for standardisation.
Samir Brikho, the chief executive of Amec Foster Wheeler, said North Sea operators needed to trust service providers to deliver standardised solutions when working on projects to extend the life of North Sea assets.
Embracing impassioned calls made by oil and gas leaders repeatedly during the first few days of Offshore Europe, Mr Brikho set out how oil and gas firms could rely on service providers to tackle the tricky problems of growing complexity that has put ageing North Sea assets at risk following the oil price crash. Delegates at the biennial oil and gas show heard earlier in the day yesterday that the gap between income from oil and gas sales and costs had widened to £4.2billion in the UK continental shelf, putting much of the industry currently on and “unsustainable” footing.
He said the North Sea was different in that most contracts are done on a “reimbursable” basis where the client decides the specification of the job.
Mr Brikho said: “If you say ‘I’m bringing you a standard 6 inch pipe’, he says he wants 6.5 inches. I bring you a standard pump he says that’s not what I want. If I bring it in grey, he wants it in red.
“If you have comment on everything I do, we’ll do it – so what do you want me for?
“You need to trust us. We know what we are doing. We have been doing this so many years now, we know exactly how it works.
“It is like you go to a Mercedes factory and you tell the guy how to put it together. That is not your business.”
He said late life assets in the North Sea were set to benefit most from taking a standardised approach as new projects that the firm is involved with such as Clare Ridge and the Cygnus gas field had already been engineered.
“If we continue like this the level of investment will go down £4billion a year, compared to £14.7billion we had only a few years back.
“We can make many of the jobs feasible, We can offer a reduction of costs 30 to 50 to 60%. If we can do these things half price, these things become viable and you can prolong the sunset quite a lot.”
He added: “At Amec Foster Wheeler we are taking this very seriously in different ways.
“Cost cutting – it goes without saying that everyone needs to do that. Efficiency improvement, every body needs to see how we can do it.
“The biggest opportunity here is transformation of the industry. The future needs to be different to how it has been in the past. The definition of insanity is to do that same things time after time and expect to get different results.”
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